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Those Who Can't Sort, Steal: Caste, Occupational Mobility, and Rent-Seeking in Rural India

Nicholas Lawson () and Dean Spears ()
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Nicholas Lawson: Princeton University
Dean Spears: University of Texas at Austin

No 12538, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Three important features of Indian labor markets enduringly coexist: rent-seeking, occupational immobility, and caste. These facts are puzzling, given theories that predict static, equilibrium social inequality without conflict. Our model explains these facts as an equilibrium outcome. Some people switch caste-associated occupations for an easier source of rents, rather than for productivity. This undermines trust between castes and shuts down occupational mobility, which further encourages rent-seeking due to an inability of workers to sort into occupations. We motivate our contribution with novel stylized facts exploiting a unique survey question on casteism in India, which we show is associated with rent-seeking.

Keywords: caste; occupational mobility; rent-seeking; India; labour markets in developing countries (search for similar items in EconPapers)
JEL-codes: O15 J71 J24 J47 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2019-08
New Economics Papers: this item is included in nep-dev and nep-lma
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